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How development finance institutions can play a catalytic role in the 2030 agenda

Twenty-five years ago, seven bilateral European development finance institutions (DFIs) dedicated to the private sector in developing countries formed a group devoted to exchanging views and experiences, co-investing and harmonising standards at a high level.

Back then, development policy did not focus on private sector development at all. DFIs were rather small and not really considered an important component of development finance. Since 1992, several new DFIs have been established in Europe, and today, theEuropean Development Finance Institutions(EDFI) represents 15 European DFIs.

Their combined portfolios have grown from approximately US$2 billion 25 years ago to close to US$50 billion in 2017. Countries outside Europe have also strengthened their bilateral DFIs and, most recently, Canada has decided to create its own institution.International Finance Corporationand the private arms of the regional development banks have also gained considerable strength. It is very clear that DFIs are becoming a significant and rapidly growing actor in financing sustainable development.